How you can get out of debt once and for all

So, you've decided you're ready to get out of debt once and for all. You're frustrated that you send off payments each and every month, that your credit card interest rate is sky high, and that so much of your monthly income is going to debt. I can absolutely relate!

About thirty years ago, I fell down a flight of stairs and wound up having to have both of my kneecaps removed (but, because they wanted to prevent removing both, they only removed on immediately and the other three months later). The recovery was long and hard, and because I was a blue collar worker at the time, I spent over a year out of work. My wife and I were newly married, with small children, and though we had some savings (we were saving for a downpayment on a house), we quickly went through that because of the medical expenses...

We had little choice but to turn to our credit cards to pay our monthly living expenses, and honestly, I'm so glad that the credit card companies were there for us until we could get back on our feet. But, coming out of my recovery facing over $10,000 in credit card debt... It was really stressful! (And, remember, this was 30 years ago--my annual income was only ten grand.)

When I was back at work, my wife and I decided that we wanted to get out of debt as quickly as possible, and within just five years, we were able to send off the last check, officially becoming debt free. It was a *great* feeling! I'd love to show you how we did it so you can do it too.

Though this was before Dave Ramsey and his debt snowball formula, that was exactly what we did. Though, in the beginning, we started by paying off the very smallest balances. Within six months, we'd knocked out two credit card balances. Though we hadn't reduced our overall debt by that much, it felt great to cut up those credit cards and call to cancel them.

Once we'd gotten rid of those two bills, my wife and I decided that we didn't want to focus all of our energy exclusively on getting out of debt, so I got a second job and we took that new money and put all of it into a savings account. Watching a savings account grow each month while still watching our debt shrink was extremely motivating.

Looking back now, though, that savings account was good for a lot more than just motivation. See, that savings account helped us handle any emergencies that came up (like when the car needed repairs) without putting that onto a credit card. So, though it might sound counterintuitive, saving our money helped us get out of debt.

If you can't get a second job or otherwise find extra income, that's okay. Instead, commit a percentage of each pay check to a savings account--even if all you can afford right now is .001% of each check. You can save some of it, and a wonderful thing happens as you make this commitment--more money will come your way.

So, we were building a savings account, we'd knocked off two of our credit card debts, and we were feeling inspired and motivated. We turned our attention to the highest interest rate card and started making three times the minimum payment. This helped the balance drop really quickly. Though it wasn't our largest balance, it was such a great feeling sending them the final check and saying goodbye to that too-high interest rate.

Three debts down, four to go, our savings account now at three months income, we were feeling really good about our path to get out of debt. If you've followed these steps, you will be too. Throughout, the important thing was to keep our eyes on the goal--how good it was going to feel to be completely out of debt. That was what made it easy (or easier) to skip my birthday dinner out that year and instead to have a family game night at home. That was what made it easy for my wife to skip a big anniversary gift that year. (Instead, I brought her flowers.) Don't underestimate the power of having a vision for what your life will look like when your family gets out of debt--it may sound a little woo-woo, but it really is what keeps you motivated, and what makes it a little less of a challenge to give up those things you enjoy but that you simply can't afford right then.

So, we've seen the first three steps: 1) Knock down a little debt or two so you build your confidence; 2) Start a savings account and commit a certain amount of money to it each month; 3) Hold the vision.

I think now's an important time to mention that one of the reasons my wife and I were able to get out of debt so quickly was that we were both fully committed. Had my wife been committed, but I was still out there charging things on the credit card, we never would have gotten anywhere.

So, if you and your spouse/partner aren't on the same page, you need to *get* on the same page fast. Talk about this together--explain why it's so important to you to get out of debt. Talk about what will become possible when you reach this goal together, and talk about ways that you can make it more pleasant (maybe you agree to go out to a nice dinner once a month). Talk about ways you can bring more money in so that you can pay off the debt more quickly. Also, it's important that you take a realistic, complete look at your finances, but don't pay too much attention to those "how long will it take to get out of debt" calculators. An interesting thing happens when you make a firm commitment to get out of debt--it starts to happen more quickly. (As long as you stay the course.)

In my wife and my case, we received a check from the people I'd worked with when I was injured--about two years after I'd last saw them, they delivered the $500 check, and that helped us knock out a portion of our debt. When I've talked with other people who've done what we did, I've found these kinds of stories are really common--people receive small money gifts, large money gifts, inheritances, tax refunds and more all to help them pay off their debt more quickly.

So, worst case scenario, the calculators are right, but most likely, you'll wind up out of debt much more quickly than that. (And, worst case scenario, you're still debt-free, and that is truly priceless).

Getting out of debt is all about staying the course, staying committed, and taking the baby steps it takes to make it happen. Focus on one debt at a time, and build your savings while you're paying off your debt. This process will help you build great credit, and living debt free is definitely its own reward. Remember, it's absolutely worth it to get out of debt, and I know you can do it! Good luck, and make it happen.